First Mover Asia: Bitcoin Jumps Above $31K; Ether Gas Fees Drop

Crypto analysts are starting to ask if the market is finding a bottom after the latest downdraft.

AccessTimeIconMay 31, 2022 at 12:19 a.m. UTC
Updated May 31, 2022 at 2:45 p.m. UTC

Bradley Keoun is the managing editor of CoinDesk's Markets team. He owns less than $1,000 each of several cryptocurrencies.

Good morning. Here’s what’s happening:

Prices: A day after bitcoin completed its record ninth-straight weekly decline, the largest cryptocurrency's price jumped by the most since early March.

Insights: Ethereum's gas fees are at a record low, Sam Reynolds reports.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis. And sign up for First Mover, our daily newsletter putting the latest moves in crypto markets in context.

Prices

Bitcoin (BTC): $31,646 +8.4%

Ether (ETH): $1,990 +11%

Biggest Gainers

Asset Ticker Returns DACS Sector
Cardano ADA +17.8% Smart Contract Platform
Internet Computer ICP +15.7% Computing
Chainlink LINK +12.2% Computing

Biggest Losers

There are no losers in CoinDesk 20 today.

Bitcoin posts biggest daily price rise in two months, as crypto markets rally broadly

Traditional markets were mostly closed in the U.S. on Monday for the Memorial Day holiday, but bitcoin (BTC) didn't rest.

The largest cryptocurrency by market value jumped more than 7% to about $31,500, in its biggest gain since March 9.

The sudden burst higher came as bitcoin had just completed a record nine-week losing streak that took the price down to around $29,400 from $37,600.

Now, crypto analysts are starting to ask if the market is finding a bottom after the latest downdraft.

According to the blockchain analysis firm Glassnode, the recent selling pressure might be easing up. "The price action appeared to have bottomed for the time being," Glassnode wrote Monday in its Uncharted newsletter.

Almost all major cryptocurrencies were in the green on Monday, with Cardano's ADA gaining some 17% and leading the CoinDesk 20.

Markets

(Most traditional markets were closed in the U.S. on Monday for an official holiday.)

Insights

As motorists complain about gas fees being too (expletive deleted) high, crypto traders are dealing with the opposite: Ethereum's gas fees are at a record low, Sam Reynolds reports.

The average transaction fee is around $3.70 now, according to on-chain data. When the year began that number was between $38 and $52 depending on the chain congestion at the time.

CoinDesk - Unknown

Ethereum average transaction fee (Bitinfocharts.com)

As such, gas-heavy transactions like selling a non-fungible token (NFT) on OpenSea or completing a Uniswap transaction are at all-time lows.

Traders seem to be spooked by the fallout of Terra and have been hesitant about jumping back into the market. On-chain data shows that throughout May there were massive spikes in gas consumption on key dates related to Terra’s decline, and subsequent spikes in activity on Uniswap as traders repositioned to shield themselves from market volatility.

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(Glassnode)

The problem is, they aren’t getting back into the market: Gas is low, Uniswap is (comparatively) idle, and the price of ether continues to trend downward. Ether’s price is recovering, but demand is weak because there aren’t as many active traders at the moment.

While the prices of Solana's SOL and Avalanche's AVAX have begun to recover, the number of daily active users has not. Both of these chains were built in an era of high Ethereum gas fees, so it could be that low gas isn’t driving a rush to their doors. But it's more likely there’s no reason to do anything at all until things stabilize.

One knock-on effect from all of this will be how soon the Ethereum Merge happens. Because without high gas fees, there will be less a sense of urgency in migrating to proof of stake, and with that comes controlled, more predictable fees. What was once expected in June has been pushed off to “the fall” (autumn) and prediction markets are putting that date between October and the end of the year. Let’s see if gas fees stay low and this is delayed again.

Important events

Japan Jobs, Industrial Production, Retail Sales: 3:50 p.m. HKT/SGT (7:30 a.m. UTC)

China Manufacturing PMI 5 p.m HKT/SGT(9 a.m. UTC)

U.S. Consumer Confidence Index: 10 p.m. HKT/SGT (2 p.m. UTC )

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover/" on CoinDesk TV:

Bitcoin still stuck in a range and ether remains down after the top cryptocurrencies both lost pivotal support levels. Why is sentiment still so weak for the broader crypto markets? Urs Bernegger of SEBA Bank joins "First Mover" to share his crypto markets outlook. Plus, StepN Co-Founder Yawn Rong explains the popular "move-to-earn" game.

Headlines

Terra’s Mirror Protocol Allegedly Suffers New Exploit: Community users are raising the alarm about a possible bug in the LUNC pricing oracles.

Letters to Layer 2: We Still Know Nothing About the Metaverse: Will the metaverse be expensive to use? Will there be more than one? Who, ultimately, is responsible for building it? CoinDesk's Daniel Kuhn explores the questions.

Bitcoin Shows Signs of Bottoming Out After 9 Weeks of Losses: The $29,500 level is acting as major support for the world’s largest cryptocurrency.

India 'Fairly Ready' With Crypto Consultation Paper, Govt. Official Says: India has not yet finalized crypto-specific legislation.

Longer reads

Letters to Layer 2: We Still Know Nothing About the Metaverse: Will the metaverse be expensive to use? Will there be more than one? Who, ultimately, is responsible for building it?



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Bradley Keoun is the managing editor of CoinDesk's Markets team. He owns less than $1,000 each of several cryptocurrencies.

CoinDesk - Unknown

Bradley Keoun is the managing editor of CoinDesk's Markets team. He owns less than $1,000 each of several cryptocurrencies.